Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
thumb_up100%
Chapter 8, Problem 4P
To determine
Calculate the present value.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Michelle has won a prize that will pay her $1000 per year, starting one year from today,for 15 years. Inflation is expected to be 3% per year for the next 15 years, and her interest rate is 5% per year. What is the present value of this prize today? (Treat the 3% inflation as a negative 8, thus g = -3%, and i is 5%)
Inflation has been a reality for the general economy of the U.S. in many years. Given this assumption, calculate the number of years it will take for the purchasing power of today’s dollars to equal onethird of their present value. Assume that inflation will average 2.5% per year.
An electronic device cost $1250 in 2011. If inflation has averaged 2% each year, what is the price of the device in 2018?
Chapter 8 Solutions
Engineering Economy (17th Edition)
Ch. 8 - The seasonal energy efficiency ratio (SEER) is 13...Ch. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10P
Ch. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - A commercial building design cost 89/square-foot...Ch. 8 - Prob. 15PCh. 8 - Prob. 16PCh. 8 - Prob. 17PCh. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Prob. 29PCh. 8 - Prob. 30PCh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Prob. 39PCh. 8 - Prob. 40PCh. 8 - Prob. 41PCh. 8 - Prob. 42PCh. 8 - Prob. 43PCh. 8 - Your company manufactures circuit boards and other...Ch. 8 - Prob. 45PCh. 8 - Prob. 46PCh. 8 - Prob. 47PCh. 8 - Prob. 48PCh. 8 - Prob. 49SECh. 8 - Prob. 50SECh. 8 - Prob. 51SECh. 8 - Prob. 52CSCh. 8 - Suppose the cost of electricity is expected to...Ch. 8 - Prob. 54CSCh. 8 - Prob. 55FECh. 8 - Prob. 56FECh. 8 - Prob. 57FECh. 8 - Prob. 58FECh. 8 - Prob. 59FECh. 8 - Prob. 60FECh. 8 - Prob. 61FE
Knowledge Booster
Similar questions
- Jeff just received a refund of $2,178 from his family physician. This was anoverpayment on his account, and it has been three years since the overpayment was due. Jeff is really frosted by this delay! What is the purchasing power now (year 0) of the overpayment if inflation has been 4%, 3%, and 2%, respectively, in years −3 (three years ago), −2 (two years ago), and −1 (last year)?arrow_forwardFind the inflation rate necessary for something to cost exactly twice as much as it did 10 years earlier.arrow_forwardA buy and sell agent buys a motorcycle for 37,000.00 in the year 1990 and it was sold for 90, 000.00 in the year 2000. If the increase in price is due to inflation, find the average rate of inflation within the period. Using this formula F=P(1+f)^n.arrow_forward
- Goods costing $27.10 at the beginning of the year 1940 cost $176.52 at the beginning of the year 1979. Find the average annual inflation rate over this time period. Express your answer the nearest thousandth of a percent.arrow_forwardThe price of cotton sky-rocketed during the Civil War because of Union naval blockades of Confederate ports. This was a primary reason the South experienced 4,000% inflation from 1861 to 1865 (four years). Specifically, what cost 1 cent in 1861 cost $40 in 1865. What was the equivalent annual inflation rate that the South was forced to endure?arrow_forwardAssume your salary is $55,000 in 2015 and $160,000 in 2045. If inflation has averaged 2% per year, what is the real or differential inflation rate of salary increases?arrow_forward
- Because of general price inflation in our economy, the purchasing power of the dollar shrinks with the passage of time. If the average general inflation rate is expected to be 8% per year for the foreseeable future, how many years will it take for the dollar's purchasing power to be one-third of what it is now?arrow_forwardThe cost of first-class postage has risen by about 5% per year over the past 30 years. The U.S. Postal Service introduced a one-time forever stamp in 2008 that cost 41 cents for first-class postage (one ounce or less), and it will be valid as first-class postage regardless of all future price increases. Let’s say you decided to purchase 1,000 of these stamps for this one-time special rate. Assume 5% inflation and your personalMARR is 10% per year (im). Did you make a sound economical decision?arrow_forwardThe answer should be typed. With 100% accuracy.arrow_forward
- The cost of 1,000 cubic feet of natural gas has increased from $6 in 2000 to $15 in 2006. What compounded annual increase in cost is this? How does the increase in the cost of natural gas compare to a 3% annual rate of inflation during the same period of time?arrow_forwardA man deposited his first paycheck of $2000 into a long-term savings account at a bank at an interest rate of 12% in 1951 as a gift to his future grandchild. Assume a steady inflation rate of 8%. If his grandchild withdraws that money today in 2021, how much actual money did they withdraw? How much purchasing power would this withdrawal have in 1951?arrow_forwardIn 1980 the inflation rate was 11.83%. If an item cost $100 in 1980 and if the inflation rate has remained 11.83%, what would that item cost today (2018)?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning